HMRC Mileage Rates 2026/27: A Complete Guide

May 2026 AMAP update:

It was announced in May 2026 that the Approved Mileage Allowance Payment (AMAP) rate will increase to 55p per mile for the first 10,000 business miles in a tax year for cars and vans. The 22% increase marks the end of a 15-year freeze, and should be backdated to any applicable travel from 6 April 2026 (the start of the 2026–27 tax year).

Autumn Budget 2026 update: the 55p rate for the first 10,000 business miles is now permanent. From 6 April 2027, the rate above 10,000 miles rises from 25p to 35p. Read what the Budget means for expense management.

For the 2026/27 tax year (6 April 2026 to 5 April 2027), HM Revenue and Customs (HMRC) sets the Approved Mileage Allowance Payment (AMAP) rate for an employee’s own car or van at 55p per mile for the first 10,000 business miles and 25p per mile after that. Motorcycles are 24p per mile, bicycles are 20p per mile, and there’s a 5p per mile supplement for each qualifying passenger. Company cars use HMRC’s separate Advisory Fuel Rates (AFRs), which are reviewed quarterly—the current set took effect on 1 September 2026.

To make things easier for you, here are all the current figures in one place before we get into the detail.

The 2026/27 rates at a glance

According to HMRC, these are the approved rates for employees using their own vehicles for business travel.

Vehicle type	First 10,000 business miles	Over 10,000 business miles	Effective from
Cars and vans	55p per mile	25p per mile (35p from 6 April 2027)	6 April 2026
Motorcycles	24p per mile	24p per mile	6 April 2026
Bicycles	20p per mile	20p per mile	6 April 2026
Passenger supplement (cars and vans)	5p per mile per qualifying passenger	5p per mile per qualifying passenger	6 April 2026

Source: HMRC, Travel—mileage and fuel rates and allowances, effective 6 April 2026 to 5 April 2027.

And here are the rates for company cars. These cover petrol, diesel, Liquefied Petroleum Gas (LPG) and electric vehicles, and aren’t tied to the tax year—HMRC reviews them every quarter.

HMRC Advisory Fuel Rates—effective from 1 September 2026

Fuel type	Engine size or charging method	Rate per mile	Effective from
Petrol	1,400cc or less	14p	1 September 2026
Petrol	1,401cc to 2,000cc	17p	1 September 2026
Petrol	Over 2,000cc	27p	1 September 2026
Diesel	1,600cc or less	15p	1 September 2026
Diesel	1,601cc to 2,000cc	16p	1 September 2026
Diesel	Over 2,000cc	22p	1 September 2026
LPG	1,400cc or less	11p	1 September 2026
LPG	1,401cc to 2,000cc	13p	1 September 2026
LPG	Over 2,000cc	20p	1 September 2026
Electric	Home charging	7p	1 September 2026
Electric	Public charging	15p	1 September 2026

Source: HMRC, Advisory fuel rates, effective from 1 September 2026. Reviewed quarterly; the next review is expected on 1 December 2026.

What are HMRC Approved Mileage Allowance Payments?

Mileage Allowance Payments (MAPs) are the amounts you can pay employees, tax-free, when they use their own vehicles for business travel. Rather than reimbursing fuel, insurance, servicing and wear and tear separately, HMRC sets a flat pence-per-mile rate that covers everything in one go.

When those payments stay at or below HMRC’s approved rate, they’re known as Approved Mileage Allowance Payments (AMAPs). As long as you pay at or below the approved rate, there’s nothing to report to HMRC and nothing to tax. Simple, in principle.

Why this matters for you

A lot of organisations don’t realise that underpaying employees (say, reimbursing at 30p per mile rather than the approved 55p) means employees can claim the shortfall back themselves through Mileage Allowance Relief (MAR). That’s an admin burden you’re quietly pushing onto your people and, indirectly, your finance team, all for the sake of a few pence.

Overpaying, on the other hand? Any amount above the approved rate is taxable. For income tax, the excess needs to go on a P11D form for 2026/27. From 6 April 2027, taxable expenses like this must be reported through payroll instead. For National Insurance, anything above the qualifying rate counts as earnings, so Class 1 National Insurance is due through payroll. So, it’s worth getting this right.

There’s also a National Insurance nuance that often gets missed. For income tax, the car and van rate drops from 55p to 25p once an employee passes 10,000 business miles in the tax year. For National Insurance purposes, though, HMRC’s Rates and thresholds for employers 2026 to 2027 confirms the qualifying amount is 55p per mile for all business miles—there’s no 10,000-mile split. That means an employee who’s paid 55p for miles over 10,000 could have a taxable amount for income tax while still being within the National Insurance limit. This works well once your payroll team knows about it, but be aware that it catches out organisations who assume the two calculations are identical.

What are the HMRC mileage rates for 2026/27?

The headline change is the car and van rate: 55p per mile for the first 10,000 business miles, up from 45p. HMRC announced it on 21 May 2026, backdated to 6 April, so it covers the whole tax year. The 25p rate over 10,000 miles is unchanged for 2026/27. The Autumn Budget 2026 then made the 55p rate permanent and confirmed the rate above 10,000 miles will rise to 35p from 6 April 2027.

The rest of the picture is stable:

• Motorcycles: 24p per mile, unchanged for 2026/27, with no 10,000-mile threshold.

• Bicycles: 20p per mile, unchanged for 2026/27, with no 10,000-mile threshold.

• Passenger supplement: 5p per mile for each qualifying passenger in a car or van, unchanged for 2026/27.

The passenger supplement only applies when the passenger is also travelling for business, such as a colleague heading to the same client meeting. Employees can’t claim tax relief on passenger miles you don’t pay, so include the 5p in your policy if you want them to benefit.

You’ll find the full rate card in HMRC’s Mileage Allowance Paymentsguidance.

A quick use-case snapshot: when the 55p rate was announced, a regional housing association used its claims system to calculate the 10p top-up owed since 6 April and paid it in the next payroll run. Organisations with 45p hard-coded into templates spent weeks reworking claims by hand—a reminder that a rate change is only “done” once every claim route reflects it.

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How to calculate mileage reimbursement

It’s straightforward. Multiply the business miles driven by the relevant rate, applying the two-tier structure for cars and vans once the 10,000-mile threshold is crossed.

For example, an employee drives 14,000 business miles in their own car during 2026/27. Their tax-free reimbursement would be:

• First 10,000 miles: 10,000 × 55p = £5,500

• Next 4,000 miles: 4,000 × 25p = £1,000

• Total: £6,500

From 6 April 2027, the same 14,000 miles would be £6,900 (10,000 × 55p, plus 4,000 × 35p).

Remember that the 10,000-mile threshold is cumulative across the whole tax year (6 April 2026 to 5 April 2027), not per trip, per month or per project. If you’re tracking this manually, it’s very easy to lose count—and to keep paying 55p when you should have dropped to 25p.

This works well when employees drive a moderate amount. But be aware that for high-mileage employees, the 25p rate after 10,000 miles may not cover their actual running costs. That gap narrows from 6 April 2027, when the rate rises to 35p. You can’t pay more than the approved rate tax-free, so the question becomes a policy one: do you top up (and report the excess as taxable), or do you leave the employee to absorb the difference? Neither answer is wrong, but it’s a conversation worth having before someone raises it in an appraisal.

If you’d like a fuller walkthrough of the process from claim to payment, our guide to how mileage reimbursement works covers it end-to-end.

A closer look at each vehicle type

Cars and vans

The approved rate for cars and vans is 55p per mile for the first 10,000 business miles, then 25p per mile for everything after that, effective from 6 April 2026. From 6 April 2027, the rate above 10,000 miles rises to 35p. This applies regardless of engine size, fuel type or the age of the vehicle.

That includes hybrid cars. HMRC doesn’t publish a separate AMAP rate for hybrids, so they follow the same 55p/25p structure as petrol and diesel vehicles.

What about electric vehicles (EVs)? For employees using their own electric cars for business, the standard 55p/25p AMAP rate still applies—there’s no separate rate for personally owned EVs. (The 7p and 15p electric rates you might have seen are Advisory Fuel Rates for company cars, which we cover further down.) The running costs of an EV are quite different from a petrol car, and this is one area where HMRC’s approach is regularly debated. For now, though, the same rates apply.

Let’s put this into practice: Clara works in field sales and uses her own hybrid hatchback for client visits. She logs 11,500 business miles in 2026/27. As her employer, you’d reimburse her 10,000 × 55p = £5,500, plus 1,500 × 25p = £375. That’s a total of £5,875, all tax-free.

Motorcycles

Employees using their own motorcycles for business can claim 24p per mile for 2026/27, effective from 6 April 2026. Unlike cars and vans, there’s no two-tier system and no 10,000-mile threshold to manage. The 24p rate applies however many miles are ridden.

For example, if an employee travels 6,000 business miles on their motorcycle, that’s 6,000 × 24p = £1,440 in tax-free reimbursement.

Bicycles

Yes, cycling for work counts too. The approved rate is 20p per mile for 2026/27, effective from 6 April 2026, with no mileage limit. It covers things like maintenance, insurance and general wear and tear. It might sound small, but for employees who regularly cycle between sites or to client meetings, it adds up—and it’s a nice way to encourage greener travel across your organisation.

One balanced point here: a lot of organisations don’t realise the cycle rate exists at all, so it never makes it into the expenses policy. Adding a single line about it costs nothing and shows employees you’ve thought about how they actually travel.

What journeys count as business mileage?

This is where a lot of organisations—and employees—get caught out. Not every work-related journey qualifies for mileage reimbursement.

Journeys that do qualify:

• Travelling from one office or work location to another.

• Visiting a client, customer or supplier at their premises.

• Travelling to a temporary workplace (HMRC has specific rules on what counts as “temporary”, so check its guidance if an assignment is long-running).

• Attending a conference, training event or business meeting away from the usual workplace.

Journeys that don’t qualify:

• The daily commute from home to a permanent, regular place of work.

• Any travel for private purposes, even if the employee takes a work call on the way.

• Travel to a location so close to the regular workplace that HMRC would treat it as effectively the same place.

Commuting claims are a common error, and one HMRC takes seriously. The key distinction is “temporary workplace” versus “permanent workplace”, and HMRC’s guidance on ordinary commuting and private travel sets it out in detail.

One thing to keep in mind: the approved mileage allowance is the tax-free route for reimbursing business miles in an employee’s own vehicle. If you give an employee a cash car allowance or pay for their fuel directly, that arrangement is taxed differently. Parking charges and tolls are a separate matter too—they’re reimbursed as expenses in their own right, not through the mileage rate.

This works well when your policy spells out the qualifying journeys with a couple of examples. But be aware that hybrid working has blurred the lines for many people, so it’s worth revisiting your definition of “permanent workplace” if employees now split their week between home and the office.

AMAPs vs Advisory Fuel Rates: which rate should you use?

AMAPs and Advisory Fuel Rates are the two HMRC frameworks that govern mileage reimbursement. Which one applies depends entirely on who owns the vehicle.

Question	AMAP	Advisory Fuel Rate (AFR)
Vehicle ownership	Employee’s own vehicle	Company car
What the rate covers	Fuel and wider running costs (insurance, servicing, wear and tear)	Fuel or electricity only
Rate cycle	Set for the tax year	Reviewed quarterly
Current effective date	6 April 2026 (to 5 April 2027)	1 September 2026
Mileage threshold	10,000 business miles for cars and vans	None—based on engine size, fuel type or charging method
Tax position	Tax-free at or below the approved rate	Treated as no taxable profit when used at or below the advisory rate
Official source	GOV.UK travel and mileage rates	GOV.UK Advisory fuel rates

Sources: HMRC, effective 6 April 2026 (AMAPs) and 1 September 2026 (AFRs).

The logic is simple once you see it. When an employee drives their own car, they’re carrying all the costs of ownership, so the rate is higher and covers everything. When the organisation provides the car, it’s already paying for the vehicle itself, so the rate only needs to cover fuel or electricity.

Using the wrong set is a common compliance issue. Paying AFR rates to someone driving their own car leaves them short (and eligible for Mileage Allowance Relief); paying AMAP rates to someone in a company car creates a taxable benefit.

What are the current HMRC Advisory Fuel Rates?

Advisory Fuel Rates (AFRs) apply to company cars and are used for two purposes:

• Reimbursing employees for business travel in a company car.

• Calculating what employees need to repay if they’ve used company-paid fuel for private travel.

HMRC reviews AFRs quarterly, in line with fuel and energy prices. The current rates took effect on 1 September 2026, and the next review is expected on 1 December 2026. Employers can keep using the previous quarter’s rates for up to one month after a new set comes into force, so you do get a short transition window—but don’t stretch it beyond that.

Here’s what changed on 1 September 2026 compared with the previous quarter:

• Petrol over 2,000cc: increased from 26p to 27p per mile.

• Diesel 1,601cc to 2,000cc: decreased from 17p to 16p per mile.

• Diesel over 2,000cc: decreased from 23p to 22p per mile.

• LPG over 2,000cc: decreased from 21p to 20p per mile.

The smaller engine bands (petrol 1,400cc or less at 14p, petrol 1,401cc to 2,000cc at 17p, diesel 1,600cc or less at 15p, and the LPG bands at 11p and 13p) are unchanged from the previous quarter.

Electric company cars

HMRC publishes separate advisory rates for fully electric company cars, split by charging method. From 1 September 2026, these are 7p per mile for home charging and 15p per mile for public charging.

If employees charge across both home and public chargers, you’ll need to apportion the mileage between the two rates on a fair and reasonable basis. Hybrid company cars are treated as petrol or diesel for AFR purposes, depending on their engine type—they don’t use the electric rates.

This works well when your fleet is mostly one fuel type. But be aware that a mixed fleet means checking four different rate tables every quarter, and a missed update quietly becomes a compliance issue three months later. Putting the quarterly review dates in your finance calendar is a small habit that saves a lot of tidying up.

What about company car and van benefit charges?

If your organisation provides company cars or vans, mileage is only part of the picture. Employees using a company vehicle may also face benefit-in-kind charges on the vehicle itself, and on any fuel provided for private use. Fully electric company cars don’t attract the car fuel benefit charge, because electricity isn’t treated as fuel for that purpose.

This works well when employees understand that mileage reimbursement and the benefit-in-kind charge are two separate calculations. But be aware that a lot of people assume the mileage rate already accounts for having the vehicle at all, which can lead to confused questions when a P11D benefit shows up separately from their mileage claim.

The benefit charge figures for 2026/27 are published separately by HMRC, and we cover them in our guide to company car and fuel benefit rates for 2026. If you’re reporting these through payroll rather than on a P11D, our guide to payrolling benefits in kind explains how that works.

What should you watch out for?

Even organisations with the best intentions run into trouble with mileage. Here are the most common issues to keep on your radar:

• Using the wrong rate for company cars vs personal vehicles. AMAPs are for employees’ own vehicles; AFRs are for company cars. Mixing them up is a frequent compliance issue.

• Not tracking cumulative mileage across the year. The 10,000-mile threshold applies across the full tax year. Handle it manually and it’s easy to overpay at 55p when you should have dropped to 25p.

• Applying old AFRs. Rates change quarterly. A template built on the June 2026 figures is already out of date, and the one-month grace period for the June rates ends on 30 September 2026. From 1 October, only the September figures apply.

• Accepting commuting claims. Home-to-office travel isn’t eligible, even if the employee takes a work call on the way. Make sure your expenses policy is clear on this.

• Not keeping adequate records. HMRC expects employers to keep expenses records for 3 years from the end of the tax year they relate to. Each mileage entry should include the date, start and end point, business purpose and distance. A log made at the time of the journey carries far more weight than one reconstructed later.

• Paying above the approved rate without reporting it. If you pay more than 55p per mile (or 25p over 10,000 miles, rising to 35p from 6 April 2027) for an employee’s own car, the excess is taxable and needs to be reported.

None of these are hard to fix once you know about them. The harder part is spotting them in the first place, which is where automated HMRC mileage tracking earns its keep—cumulative miles and the 10,000-mile rate switch are handled for you rather than remembered by someone.

How do you report mileage to HMRC?

For most organisations, mileage payments within the approved rates don’t need to be reported at all. But there are situations where reporting is required:

• Payments above the approved rate. If you pay more than the AMAP rate at any point—including paying more than 25p per mile (35p from 6 April 2027) once an employee has passed 10,000 business miles—the excess is taxable. For 2026/27, report it on a P11D. From 6 April 2027, taxable expenses must be reported through payroll.

• National Insurance. The National Insurance calculation uses 55p per mile for all business miles, so the income tax position and the National Insurance position can differ for the same payment. Anything paid above 55p per mile is subject to Class 1 National Insurance through payroll. HMRC’s Rates and thresholds for employers 2026 to 2027 sets out the rates.

• Payments below the approved rate. Employees who receive less than the approved rate can claim Mileage Allowance Relief from HMRC directly, either through Self Assessment or via form P87. Check GOV.UK for the current submission process.

Reporting runs a lot more smoothly when your payroll and expenses teams are in regular contact. The catch is that many organisations run the two on separate systems, so the excess-over-AMAP figure can easily get lost between them. Keeping a clean audit trail of every claim makes that handover much easier.

Make mileage tracking easier for your organisation

Tracking mileage manually—across multiple employees, multiple vehicle types, quarterly AFR changes and a 10,000-mile cumulative threshold—gets complicated quickly. The risk of errors, missed thresholds or thin records is real, and the consequences (a tax charge, or a failed HMRC compliance check) aren’t worth it.

Capture Expense’s automated HMRC mileage tracking calculates mileage from journey data using HMRC-approved rates. It tracks cumulative mileage across the year, switches rates automatically at the 10,000-mile threshold, supports multiple vehicle types and keeps a clean audit trail of every claim—ready if HMRC ever asks to see it.

You can also track carbon emissions alongside mileage, which is increasingly useful for organisations with sustainability reporting to do. Find out more about tracking CO2 and mileage data together. And if your teams are managing wider expense policies alongside mileage, our expense compliance guide brings it all together in one place.

If you’d like to see how the 2026/27 rates and the September 2026 AFRs work inside the platform, you’re warmly invited to book a demo. We’re happy to walk you through it at whatever pace suits you.

Frequently asked questions

Q. What are the HMRC mileage rates for 2026/27?

A. The approved rates are 55p per mile for the first 10,000 business miles in a car or van, dropping to 25p after that. Motorcycles are reimbursed at 24p per mile and bicycles at 20p, with no threshold for either. From 6 April 2027, the car and van rate above 10,000 miles rises to 35p.

Q. Have the mileage rates changed this year?

A. Yes. The car and van rate for the first 10,000 business miles increased from 45p to 55p per mile. HMRC announced it on 21 May 2026, backdated to 6 April 2026. The 25p rate over 10,000 miles, the 24p motorcycle rate, the 20p bicycle rate and the 5p passenger supplement are all unchanged. The Autumn Budget 2026 then made the 55p rate permanent and confirmed the rate above 10,000 miles will rise to 35p from 6 April 2027.

Q. Do the mileage rates apply to electric and hybrid vehicles?

A. Yes. Employees using their own electric or hybrid car for business travel follow the same 55p/25p AMAP structure as petrol and diesel vehicles, effective from 6 April 2026. There’s no separate AMAP rate for personally owned EVs. The 7p and 15p electric rates are Advisory Fuel Rates for company cars only.

Q. Can an employer pay less than the HMRC mileage rate?

A. Yes. For tax purposes there’s no minimum, so you can reimburse at a lower rate or not at all. However, employees paid less than the approved AMAP rate can claim Mileage Allowance Relief from HMRC on the difference, so underpaying often just moves the admin onto your people. Be aware, too, that business costs employees pay out of their own pocket can count against their pay for National Minimum Wage purposes, so check your position for all drivers.

Q. Can employees claim mileage for their daily commute?

A. No. Travel between home and a permanent workplace doesn’t qualify as business mileage. Eligible journeys include visiting clients, travelling between work locations or attending a temporary workplace. HMRC’s guidance on ordinary commuting and private travel has the full rules.

Q. Which mileage rate should I use for a company car?

A. Use HMRC’s Advisory Fuel Rates, not AMAPs. The current AFRs took effect on 1 September 2026 and are based on fuel type and engine size (or charging method for electric cars). For example, a petrol company car over 2,000cc is 27p per mile, and a fully electric company car charged at home is 7p per mile.

Q. What are the current HMRC Advisory Fuel Rates?

A. From 1 September 2026, petrol is 14p (1,400cc or less), 17p (1,401cc to 2,000cc) and 27p (over 2,000cc). Diesel is 15p (1,600cc or less), 16p (1,601cc to 2,000cc) and 22p (over 2,000cc). LPG is 11p, 13p and 20p across the same three petrol engine bands. Electric is 7p per mile for home charging and 15p for public charging. HMRC reviews these quarterly.

Q. Can I use the previous AFR after HMRC changes the rate?

A. Yes, but only briefly. HMRC allows employers to use the previous quarter’s rates for up to one month after a new set takes effect. The current rates started on 1 September 2026, so the June rates can be used until 30 September 2026. From 1 October 2026, claims should use the September figures until the next quarterly review.